In Focus (2020, Qtr 2) - Student Landlords
The NRLA Quarter 2 survey recorded 1,708 responses from members and associates. In this survey we asked landlords about their properties, attitudes and experiences in the preceeding months. This report focuses on the "student landlords" section.
In a time of uncertainty due to coronavirus, how universities operate have a significant impact upon their towns and cities. Landlords operating in the student market are especially receptive to how universities have responded to this challenge, the NRLA asked these landlords about their experiences towards the end of the 2019/20 academic year.
Coronavirus measures are still in place and seemingly continuing into 2021. It is important we gauge how the student market been affected by the measures introduced as they make up large portions of the stock of housing in towns and cities.
Student landlords
The typical student landlord owns a small portfolio of properties, almost three quarters of whom own between 1 and 4 properties (74.3%). These properties tend to be located in the "student areas" of towns and cities (54.2%).
Student landlords identified UK undergraduates as their most common tenant group, almost two thirds of student landlords let to this grouping (64.0%). This is unsurprising as undergraduates make up the majority of student in the UK.
Coronavirus and student landlords
Due to the coronavirus, student landlords have most commonly experienced several issues with their tenancies. Most commonly: requests for rent reductions (20.1%) and students vacating properties early (19.4%).
Student landlords have granted rent reductions more commonly than not (61.1%), furthermore, almost 40% of landlords granted rent holidays when requested (39.4%).
Student landlords have identified further difficulties due to coronavirus, such as finding new tenants (24.5%) and undertaking maintenance/repairs (21.1%). Coronavirus measures such as social distancing make these tasks more difficult than usual. Landlords also identified the uncertainty surrounding university courses and the consequent drop in demand as an issue in finding tenants.
Student landlord portfolio decisions
If coronavirus begins to affect business, most student landlords will look to let their properties to non-students (30.2%). Other strategies include holding property until students return (23.7%) or offering rent reductions whilst the virus continues to affect business (21.9%).
If student landlords begin to look outside of the market, they will look to continue to use their properties an an HMO (51.6%). Many identified local planning rules such as Article 4 as impediments to changing tenant groups (34.7%).
Student landlords- expectations
Student landlords will most commonly lose between 10% and 20% of their income (49.4%). Despite this, almost two thirds of student landlords have tenancies agreed for next year (65.4%).
More than half of student landlords are considering looking for non-student tenants due to uncertainties in the student market (56.2%).
Student landlords and Local Housing Allowance (LHA)
If student landlords are concerned by a potential drop in demand from students, they could potentially switch their typical tenant group and rent to those on Local Housing Allowance (LHA).
The majority of student landlords stated this would not appeal to them (66.0%). The most common reasons for this hesitancy were concerns about letting to LHA claimants (43.2%) and the reduction in income being too great (31.7%).
Conclusions
Universities in England and Wales have returned this term in as normal a manner as possible. However, with measures still in place and the risk of more stringent measures being implemented nationally, this could change.
How universities respond to new measures could affect student landlords and their business at a time when they are hoping to bounce back from coronavirus and potentially disrupt the end of the 2019-20 academic year.
Flexibility is required to ensure the supply of accommodation is maintained and sustained.
Quarter 2 Student landlords
Quarter 2 Student landlords
